Coronavirus and your personnel insurance policies
It should come as no surprise that since the ‘semi-lockdown’ of Friday, 13 March – which goes to show just how symbolic a date can be – our country has ended up in an economic crisis. Numerous measures have been adopted meanwhile to deal with this crisis. Our aim with this article is to summarise the decisions concerning policies for occupational accident insurance, group and hospitalisation insurance, life insurance and occupational disability cover.
The provisions below are decided at the level of the professional association for insurance companies, Assuralia, but are fleshed out in practice by each insurer. It is therefore always important to check through your broker with your own insurer whether the provisions meet your company’s specific needs.
A press release issued on 19 March first confirmed which consequences of the pandemic were or were not insured:
- All telework, provided it is done with the employer’s consent, is covered under the occupational accident insurance. This not only means cover for an accident during working hours at the specified place of residence, but also on the road to the place of childcare or where a meal may be picked up, and vice versa.
- If hospitalisation occurs because an employee becomes infected with coronavirus, cover and payment are provided in accordance with the policy conditions.
- For insurance that provides a guarantee in the event of death, such as group insurance, loan protection insurance or classic life insurance, there is cover in the event of a coronavirus-related death even if the person became infected abroad despite a negative travel advice.
- If the occupational disability policy provides a sickness guarantee, the period of coronavirus-related illness is covered in accordance with the policy conditions. The period of compulsory or non-compulsory quarantine without illness is not covered.
After this, many insurers sent out their own communications with possible guarantee extensions for their specific products. For example, an extension of the pre- and post-hospitalisation period for the reimbursement of outpatient medical expenses for scheduled admissions that have been postponed because of coronavirus or an extension in the occupational disability policy for employees who make home deliveries.
In a second phase, Assuralia announced additional provisions on 26 March to provide lasting protection for their clients, in this case the companies and their employees.
- All personnel in temporary unemployment will continue to benefit uninterruptedly from the existing group pension, death, guaranteed income and hospitalisation schemes, as opposed to the normal rule under which guarantees are terminated because of the suspension of the employment contract, if the employer agrees to continue to pay the premiums.
- Companies that have had to fully or partially halt their activities also have the option of postponing payment of the premiums until 30 October 2020.
These measures can only be welcomed as they will ensure personnel remain insured in these uncertain times and avoid a great deal of paperwork on the part of insurers (by stopping and restarting cover for personnel in temporary unemployment). The suspension of these guarantees should always be avoided. Yet some comments need to be made regarding the postponement of premium payments.
The personal group insurance and hospitalisation premiums will also have to be deducted retroactively from employees’ salaries for the period of temporary unemployment, once they receive a normal salary again. After all, they will have remained insured.
What happens to the interest foregone on pension insurance premiums if payment is postponed? Who foots this bill? Does the employer pay through interest charged on the premiums paid later or do the employees pay through a reduction of the pension reserve? It seems administratively difficult to adjust all policies individually and since the minimum employer guarantees also apply, this loss would mostly be borne by the employer in the end. Or would the insurers assume this loss? As it is likely this will result in a reduction in profit sharing, the cost will ultimately be borne by the employer again (because of the minimum employer guarantees, etc.). Whatever insurers decide, it is clear that the corona crisis is also leading to additional costs for these forms of insurance.
A better and simpler way to reduce the current premium cost would be to already adjust the advance premiums of the occupational disability policy (and the company’s liability) now to the reduced wage bill (or turnover) due to temporary unemployment. Instead of a repayment early at the start of next year when the settlement for 2020 is finalised, the insurer should be asked to review the advance payments now and, if necessary, cancel them.
In practice, insurers are more likely to agree to adjust advance premiums than to an application to postpone premium payments for other personal insurance policies. While individual insurers have yet to determine their specific terms, it is hoped that all types of restrictions or procedures that would diminish Assuralia’s aim with this measure will not be imposed. The measure would then completely miss the objective of solidarity and financial aid in these difficult times.